US Dollar Price Forecast: DXY Holds $100.93 on Policy Divergence
By: Arslan Ali | Updated: Jul 07, 2026
Key Points
- Sticky core inflation and fiscal deficits have reinforced the US Dollar’s strength amid monetary policy divergence.
- DXY held at $100.93 with green continuation candles retesting Fibonacci 0.618 level.
- EUR/USD defended $1.1430 blue trendline support with green rejection candles absorbing selling pressure.
- GBP/USD held $1.3380 resistance zone, testing key levels with mixed candles and neutral momentum.
Market Overview
The article discusses the current state of the US Dollar (DXY) and its performance against the Euro (EUR) and British Pound (GBP) as of July 7, 2026. The analysis highlights the impact of divergent monetary policies and economic fundamentals on currency valuations.
The US Federal Reserve's cautious approach to monetary policy, in light of persistent core inflation, has bolstered the dollar's strength. This is contrasted with the European Central Bank's (ECB) efforts to stabilize prices amid varying inflation pressures across the eurozone. The Bank of England (BoE) is also navigating its own challenges, balancing inflation in services and economic growth.
Technical Analysis
DXY Analysis
The DXY is currently positioned at $100.93, having recently broken out from a low of $97.67. The price action indicates a retest of the 0.618 Fibonacci retracement level at $100.31, with a series of mixed candles suggesting a bullish trend remains intact. The Relative Strength Index (RSI) is at 58, indicating a neutral-to-bullish bias.
Trade Idea: Buy at $100.93 with a target of $103.09 and a stop loss under $100.31.
GBP/USD Analysis
GBP/USD is trading at $1.3380, testing a descending trendline. The price has shown bullish rejection wicks, maintaining higher highs. The RSI is around 67, indicating a neutral stance.
Trade Idea: Buy at $1.3380 with a target of $1.345 and a stop loss under $1.325.
EUR/USD Analysis
EUR/USD is currently at $1.1430, having retested the 50 EMA at $1.1419. The price action shows bullish wicks and higher lows, with the RSI at 52, indicating neutrality.
Trade Idea: Buy at $1.1430 with a target of $1.155 and a stop loss under $1.140.